Dear Seniors, Kindly let us know whether construction Company is coming under the preview of ESI Act Please provide the notification if have Regards, Rajesh
From India, Hyderabad
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4From India, Hyderabad
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Dear Rajesh, Yes, a construction company comes under coverage of ESIC act if deploys 20 or more employees.
From India, Gurgaon
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From India, Gurgaon
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Dear Aniltoexcel, Can you please elaborate your answer as to how and why the construction company comes under ESIS?
From India, Mumbai
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From India, Mumbai
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If the construction agencies are employing 10 (or 20, depending on the State Government notification under section 1(5)) employees in their offices, and the office is situated in an implemented area, it is coverable. However, workers engaged by these agencies and working on the site of the construction project should not be considered either for the coverage of the establishment or for their own coverage as employees. If these construction workers are engaged in a covered factory or establishment, they are to be considered the employees of that covered factory/establishment which engaged them.
From India, Noida
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From India, Noida
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I completely agree with the first part and the last part of your answer. However, the middle part, which deals with the construction project site, has some ambiguity. There are three issues, in my opinion.
Issues with Construction Project Site and ESIS
First, where is it written in the Act that construction project sites are excluded from ESIS? Secondly, can a circular like 4/99 change any enactment? And thirdly, where is it stated in circular 4/99 that construction project sites are excluded from the coverage of ESIS?
The circular 4/99 is interpreted differently by many inspectors, and they serve demand notices to construction project employers for ESI contributions of construction employees other than casuals and temporary laborers, even though the practice of the law states that ESI is not applicable to construction project sites. This legal practice is even accepted by the Central Ministry.
Please note that if an RMC plant is installed at a project site, ESI is made applicable since the RMC plant falls under the Factory Act.
Regards
From India, Mumbai
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Issues with Construction Project Site and ESIS
First, where is it written in the Act that construction project sites are excluded from ESIS? Secondly, can a circular like 4/99 change any enactment? And thirdly, where is it stated in circular 4/99 that construction project sites are excluded from the coverage of ESIS?
The circular 4/99 is interpreted differently by many inspectors, and they serve demand notices to construction project employers for ESI contributions of construction employees other than casuals and temporary laborers, even though the practice of the law states that ESI is not applicable to construction project sites. This legal practice is even accepted by the Central Ministry.
Please note that if an RMC plant is installed at a project site, ESI is made applicable since the RMC plant falls under the Factory Act.
Regards
From India, Mumbai
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Thank you for expressing your concern about the non-coverage of construction sites under the provisions of the ESI Act, 1948. In this connection, I may submit that the said Act initially covers only "factories" as defined under Section 1(3). However, it enables and empowers the appropriate Governments to extend the provisions of the said Act to other classes of establishments as per Section 1(5). You may also be well aware that different State Governments have exercised their powers under this enabling provision and have extended the provisions of the Act to other classes of establishments, including "shops". By virtue of various court judgments, the offices of the builders/construction agencies that fall within implemented areas and employ a minimum number of employees, as mentioned by me in my previous comments, are treated as shops and are coverable under the said Act. Therefore, I must mention that the said Act nowhere states about the coverage or non-coverage of "construction project sites", and therefore, one cannot find an answer to this question in the Act.
I personally feel that the instructions issued by the ESIC via Circular 4/99, as referred to by you, are correct due to the reasons explained in the circular itself. In case there is any deviation from the said circular at any level - locally or regionally, any employer or their official can point out the violation, in my opinion, to the highest authorities in ESIC.
Furthermore, I believe the main reasons for the non-coverage of "construction site projects" are that such establishments are treated as a separate class of establishments and generally fall under the unorganized sector. The construction sites that start today will likely mean that the employees engaged therein will be from the unorganized sector in groups and will not be found once the project is completed. In social security schemes, the existence of contributions, clarity on eligibility conditions of insurable employment, satisfying the terms and conditions of payments for different benefits under such schemes are essential factors. Therefore, difficulties are faced by the social security providing organization in claiming contributions, maintaining records regarding payments and eligibility conditions, and ensuring the eligibility of benefits payments. The situation where the payments of contributions for any employee are difficult to ascertain and where the terms and conditions to satisfy the eligibility for benefits payments under social security schemes are not adhered to, makes the schemes financially unviable.
The case of "construction project sites" is not an isolated case. A similar situation exists regarding the coverage of "home workers" generally employed in beedi manufacturing units. Such home workers in the beedi manufacturing industry are also not covered under the Act, even though there may be court judgments declaring such home workers, working under the supervision of the principal employer, as qualified to be considered as "employees" under other enactments such as the EPF & MP Act, 1952.
I believe that policymakers may be considering the working conditions of construction workers and may feel an urgent need for social security benefits for such workers. However, given the prevailing conditions in India, it may take a long time to reach a stage where social security benefits will be available to all the working class.
As a practitioner and expert in labor laws, I encourage you to share your views with the appropriate authorities on the coverage of "construction project sites" for the welfare of such workers.
From India, Noida
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I personally feel that the instructions issued by the ESIC via Circular 4/99, as referred to by you, are correct due to the reasons explained in the circular itself. In case there is any deviation from the said circular at any level - locally or regionally, any employer or their official can point out the violation, in my opinion, to the highest authorities in ESIC.
Furthermore, I believe the main reasons for the non-coverage of "construction site projects" are that such establishments are treated as a separate class of establishments and generally fall under the unorganized sector. The construction sites that start today will likely mean that the employees engaged therein will be from the unorganized sector in groups and will not be found once the project is completed. In social security schemes, the existence of contributions, clarity on eligibility conditions of insurable employment, satisfying the terms and conditions of payments for different benefits under such schemes are essential factors. Therefore, difficulties are faced by the social security providing organization in claiming contributions, maintaining records regarding payments and eligibility conditions, and ensuring the eligibility of benefits payments. The situation where the payments of contributions for any employee are difficult to ascertain and where the terms and conditions to satisfy the eligibility for benefits payments under social security schemes are not adhered to, makes the schemes financially unviable.
The case of "construction project sites" is not an isolated case. A similar situation exists regarding the coverage of "home workers" generally employed in beedi manufacturing units. Such home workers in the beedi manufacturing industry are also not covered under the Act, even though there may be court judgments declaring such home workers, working under the supervision of the principal employer, as qualified to be considered as "employees" under other enactments such as the EPF & MP Act, 1952.
I believe that policymakers may be considering the working conditions of construction workers and may feel an urgent need for social security benefits for such workers. However, given the prevailing conditions in India, it may take a long time to reach a stage where social security benefits will be available to all the working class.
As a practitioner and expert in labor laws, I encourage you to share your views with the appropriate authorities on the coverage of "construction project sites" for the welfare of such workers.
From India, Noida
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Workers engaged in actual construction work are not covered under The ESI Act. We are consultants for a client in the business of construction. The employees are covered under an Employee Compensation policy. There has been no inspection in the last 5-6 years. I am attaching a circular issued by the Corp.
Regards
From India, Mumbai
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Regards
From India, Mumbai
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As Mr. Bijoy Majumdar said, the gap left by ESI in the coverage of construction labor seems to have been filled by the BOCW Act by enacting certain welfare provisions for the migratory labor engaged in construction sites.
Regards,
B. Saikumar
In-House HR & IR Advisor
From India, Mumbai
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Regards,
B. Saikumar
In-House HR & IR Advisor
From India, Mumbai
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As Ramesh states, it is the prerogative of the state governments. In Tamil Nadu, the coverage ceiling for shops has been reduced from 20 to 10, whereas in Maharashtra, it remains at 20.
Extension of ESI Coverage in Tamil Nadu
In Tamil Nadu, new sectors such as hospitals and educational institutions have been brought under the ambit of ESI coverage through the extension of the ESI scheme by the TN state government. However, Maharashtra has not yet issued such a notification, resulting in educational institutions not being covered in Maharashtra.
Potential Extension to Other Sectors
Similarly, the scheme could be extended to the agricultural sector, but no state government has taken steps in that direction. Likewise, construction workers, plantation workers, etc., have yet to be included in the coverage due to the lack of notification by the state governments.
It is possible that the top policymakers have considered the nomadic nature of jobs in these sectors and deemed it impractical to bring them under the ESI ambit. Additionally, state governments have already developed specific schemes (as mentioned by Ramesh above) that serve as viable alternatives to the ESI scheme, ensuring that social security is not withheld from workers in these sectors.
Regards,
Ramesh
From India, Madras
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Extension of ESI Coverage in Tamil Nadu
In Tamil Nadu, new sectors such as hospitals and educational institutions have been brought under the ambit of ESI coverage through the extension of the ESI scheme by the TN state government. However, Maharashtra has not yet issued such a notification, resulting in educational institutions not being covered in Maharashtra.
Potential Extension to Other Sectors
Similarly, the scheme could be extended to the agricultural sector, but no state government has taken steps in that direction. Likewise, construction workers, plantation workers, etc., have yet to be included in the coverage due to the lack of notification by the state governments.
It is possible that the top policymakers have considered the nomadic nature of jobs in these sectors and deemed it impractical to bring them under the ESI ambit. Additionally, state governments have already developed specific schemes (as mentioned by Ramesh above) that serve as viable alternatives to the ESI scheme, ensuring that social security is not withheld from workers in these sectors.
Regards,
Ramesh
From India, Madras
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To bring more clarity to the subject matter, I submit/re-submit as follows:
1. I completely agree with Harsh Kumar ji that the construction agencies employing 10 (or 20, depending on State Govt. notification under section 1(5)) employees in their offices, situated in an implemented area, are to be covered.
2. I also completely agree with Harsh Kumar ji that if the construction workers are engaged in a covered factory or establishment, they are to be considered employees of that covered factory/establishment which engaged them and are to be covered.
Coverage of Construction Workers at Construction Sites
Now the question is whether the construction workers engaged at construction sites in an implemented area are to be covered under the Scheme or not?
In regards to Serial No. 3 above, I reiterate:
1. The prevalent practice is that construction workers are not covered under the Scheme, invariably.
2. However, there is a difference of opinion on this matter.
3. I have come across cases wherein the Corporation is claiming contributions from construction companies in respect of construction workers.
Some construction companies have made representations at various stages, including during inspection, personal hearings (C-18), and in matters under section 75(2B) on the following points:
1. By virtue of Circular 4/99, ESIS is not applicable to construction workers on-site.
2. The Central Ministry is well aware of the non-implementation of ESIS for construction workers, and the proposed decision for its implementation is pending due to the lack of notification in this regard.
3. No such demand was raised by the corporation in previous inspections, so why now?
4. And many more.
Despite strong prima facie cases presented by construction companies in their favor, courts have not granted exemption from depositing 50% of the claim amount or less in court.
Some construction companies have made representations to the ESIC Headquarters and the Central Ministry before filing an application under section 75(2B), but to no avail.
I understand that this information is not meant for public sharing, but I believe it is essential for my professional colleagues to understand the applicability of ESIS to construction workers.
Experts are encouraged to provide value additions to this.
Thank you.
From India, Mumbai
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1. I completely agree with Harsh Kumar ji that the construction agencies employing 10 (or 20, depending on State Govt. notification under section 1(5)) employees in their offices, situated in an implemented area, are to be covered.
2. I also completely agree with Harsh Kumar ji that if the construction workers are engaged in a covered factory or establishment, they are to be considered employees of that covered factory/establishment which engaged them and are to be covered.
Coverage of Construction Workers at Construction Sites
Now the question is whether the construction workers engaged at construction sites in an implemented area are to be covered under the Scheme or not?
In regards to Serial No. 3 above, I reiterate:
1. The prevalent practice is that construction workers are not covered under the Scheme, invariably.
2. However, there is a difference of opinion on this matter.
3. I have come across cases wherein the Corporation is claiming contributions from construction companies in respect of construction workers.
Some construction companies have made representations at various stages, including during inspection, personal hearings (C-18), and in matters under section 75(2B) on the following points:
1. By virtue of Circular 4/99, ESIS is not applicable to construction workers on-site.
2. The Central Ministry is well aware of the non-implementation of ESIS for construction workers, and the proposed decision for its implementation is pending due to the lack of notification in this regard.
3. No such demand was raised by the corporation in previous inspections, so why now?
4. And many more.
Despite strong prima facie cases presented by construction companies in their favor, courts have not granted exemption from depositing 50% of the claim amount or less in court.
Some construction companies have made representations to the ESIC Headquarters and the Central Ministry before filing an application under section 75(2B), but to no avail.
I understand that this information is not meant for public sharing, but I believe it is essential for my professional colleagues to understand the applicability of ESIS to construction workers.
Experts are encouraged to provide value additions to this.
Thank you.
From India, Mumbai
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I just want to add that we must read Circular 4/99 very carefully and interpret where it mentions that construction sites or all construction workers are exempted from ESIS coverage.
From India, Mumbai
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From India, Mumbai
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Dear Bijay ji, The ESI Act and BOCW Act are two different enactments with entirely different objectives. The benefits under ESIS, therefore, cannot be substituted by the medical benefits or benefits under the BOCW Act. The benefits under both enactments are separate in nature.
From India, Mumbai
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From India, Mumbai
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I appreciate the efforts made by learned members Harsh Kumar and Keshavji to clarify the issue of coverage of construction workers under ESI with reference to circular 4/99. My views on the interpretation of the circular are as follows:
Interpretation of Sec.1(5) and Employee Coverage
If one goes by the language of Sec.1(5), which empowers the appropriate government to cover an establishment other than a factory by a notification, it makes it clear that the coverage is only in respect of an establishment, but not with reference to the employees. However, the question of whether all persons employed in a covered establishment are to be admitted to ESI benefits or not is to be decided with reference to the definition of 'employee' under Sec.2(9) read with Rule 50, which lays down the wage and the employment nexus criteria. Thus, there are cases where the courts have held that labor engaged casually or on a daily wage basis can also fall within the purview of the definition of 'employee'. If so, the question that arises is why not construction labor?
Challenges in Covering Construction Labor
In my view, the object of a welfare legislation like ESI is to implement the various schemes under it successfully by ensuring that the employees covered under the Act shall be able to avail them in times of need, but not merely covering as many employees as possible. This is possible only where the employees are identifiable. Probably the ESIC must have found it difficult to implement the schemes with reference to construction labor because of their migratory and highly mobile nature. In this part, the conditions of minimum contributions for certain benefits might also be difficult to comply with in respect of migrant labor. The ESIC thus referred to these factors in the said circular to exempt construction workers at project sites.
Clarification on Circular 4/99
As Keshavji pointed out, I have not come across the use of any language in circular 4/99 that specifically exempts project sites or all employees working at project sites from coverage. This is obvious from the language that the permanent employees of the construction agencies like Engineers or supervisors at project sites are very much covered.
This is my interpretation. Any other view is welcome.
Regards,
B. Saikumar
In-House HR & IR Advisor
From India, Mumbai
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Interpretation of Sec.1(5) and Employee Coverage
If one goes by the language of Sec.1(5), which empowers the appropriate government to cover an establishment other than a factory by a notification, it makes it clear that the coverage is only in respect of an establishment, but not with reference to the employees. However, the question of whether all persons employed in a covered establishment are to be admitted to ESI benefits or not is to be decided with reference to the definition of 'employee' under Sec.2(9) read with Rule 50, which lays down the wage and the employment nexus criteria. Thus, there are cases where the courts have held that labor engaged casually or on a daily wage basis can also fall within the purview of the definition of 'employee'. If so, the question that arises is why not construction labor?
Challenges in Covering Construction Labor
In my view, the object of a welfare legislation like ESI is to implement the various schemes under it successfully by ensuring that the employees covered under the Act shall be able to avail them in times of need, but not merely covering as many employees as possible. This is possible only where the employees are identifiable. Probably the ESIC must have found it difficult to implement the schemes with reference to construction labor because of their migratory and highly mobile nature. In this part, the conditions of minimum contributions for certain benefits might also be difficult to comply with in respect of migrant labor. The ESIC thus referred to these factors in the said circular to exempt construction workers at project sites.
Clarification on Circular 4/99
As Keshavji pointed out, I have not come across the use of any language in circular 4/99 that specifically exempts project sites or all employees working at project sites from coverage. This is obvious from the language that the permanent employees of the construction agencies like Engineers or supervisors at project sites are very much covered.
This is my interpretation. Any other view is welcome.
Regards,
B. Saikumar
In-House HR & IR Advisor
From India, Mumbai
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Dear Sai Kumar ji,
Discussion on ESIC and Construction Labor
You are absolutely right, Sir. Also, the Construction Industry is accident-prone.
Yes. This circular is interpreted this way only. Not only Engineers or Supervisors but also the Carpenters, Masons, Fitters, Welders, etc. are to be covered under ESIS. Only the helpers, male coolie, and female coolie who are engaged on a purely temporary basis are to be excluded.
From India, Mumbai
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Discussion on ESIC and Construction Labor
You are absolutely right, Sir. Also, the Construction Industry is accident-prone.
Yes. This circular is interpreted this way only. Not only Engineers or Supervisors but also the Carpenters, Masons, Fitters, Welders, etc. are to be covered under ESIS. Only the helpers, male coolie, and female coolie who are engaged on a purely temporary basis are to be excluded.
From India, Mumbai
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ESIC Applicability for Construction Workers
ESIC is applicable for all construction workers effective from 01/05/2011. There is an official letter from ESIC (X-II/14/1/2008-P&D dated 27/08/2010), and it has been notified in the Gazette of India Notification No-501.
From India, Bengaluru
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ESIC is applicable for all construction workers effective from 01/05/2011. There is an official letter from ESIC (X-II/14/1/2008-P&D dated 27/08/2010), and it has been notified in the Gazette of India Notification No-501.
From India, Bengaluru
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Thank you for quoting the correct Circular issued by ESIC, New Delhi. I wish to inform all concerned HR/IR fraternity members through this forum that upon reviewing the mentioned circular (No. P-12/11/11/60/2010-Rev-II, Dt. 03-Jan-11), I promptly met with Mr. Sanjay Sinha, the then Jt. Director, ESIC, Wagale Estate, Thane. He clarified my genuine doubts regarding the extension/implementation of the ESIC Scheme to construction site workers.
Mr. Sinha elaborated on the Central Govt's intention as stated in the circular and advised us to await the final circular regarding the implementation of the ESIC Act at construction sites. However, as of today, ESIC has not issued any such circular for the implementation/extension of ESIC Schemes to construction sites, hence the Act is not applicable at the site.
The last paragraph of the circular explicitly requests all RDs/Directors/Jt. Director Incharges to conduct a survey in the first phase of Public Limited Companies engaged in construction activities in the covered areas and submit a report no later than 31-Jan-2011.
To date (more than three years have passed), we are unaware of any survey report submitted by ESIC RDs/Directors/Jt. Director in this regard. If such a report was submitted, we have not received any official communication from ESIC, New Delhi.
Therefore, I urge all concerned individuals not to panic upon reading any Government Circulars/Notifications. It is essential to read them carefully, discuss with your team members and other HR fraternity forums, and then decide on the course of action based on consensus.
By providing the above explanation, I aim to eliminate any further ambiguity/confusion on this matter. I encourage members to share their comments for a productive discussion from an HR/IR fraternity perspective.
Thank you,
Anil Sharma
From India, Pune
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Mr. Sinha elaborated on the Central Govt's intention as stated in the circular and advised us to await the final circular regarding the implementation of the ESIC Act at construction sites. However, as of today, ESIC has not issued any such circular for the implementation/extension of ESIC Schemes to construction sites, hence the Act is not applicable at the site.
The last paragraph of the circular explicitly requests all RDs/Directors/Jt. Director Incharges to conduct a survey in the first phase of Public Limited Companies engaged in construction activities in the covered areas and submit a report no later than 31-Jan-2011.
To date (more than three years have passed), we are unaware of any survey report submitted by ESIC RDs/Directors/Jt. Director in this regard. If such a report was submitted, we have not received any official communication from ESIC, New Delhi.
Therefore, I urge all concerned individuals not to panic upon reading any Government Circulars/Notifications. It is essential to read them carefully, discuss with your team members and other HR fraternity forums, and then decide on the course of action based on consensus.
By providing the above explanation, I aim to eliminate any further ambiguity/confusion on this matter. I encourage members to share their comments for a productive discussion from an HR/IR fraternity perspective.
Thank you,
Anil Sharma
From India, Pune
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With all due respect, Sir, I do not agree with the sentence you quoted. There is indeed ambiguity and confusion. I have encountered numerous cases where the Corporation is requesting contributions from Construction Employers regarding construction workers. I have come across such cases in court as well. Additionally, representations have been made to bureaucrats at various levels and to the central ministry. One of the esteemed members of this forum, Sai Kumar ji, has also mentioned that he has not found any language in circular 4/99 that explicitly exempts project sites or all employees working at project sites from coverage. The subject title of circular 4/99, which reads "Coverage of construction agencies/offices of builders under ESI Act - Clarification thereof," can be interpreted differently in my opinion.
Therefore, there exists ambiguity and confusion. You may disagree with me, and that is acceptable.
Ambiguity and confusion are prevalent in our entire legal system, and the ESI Act is not immune to it. In fact, there are many ambiguities and confusions within the ESI. Uniformity is lacking across the country in various aspects.
How Should We Proceed Under Such Circumstances?
My query to you and the HR community is: how should we proceed under such circumstances? I pose this question in the hope that we can collectively work towards establishing uniformity in the legal system.
A similar question was raised by me in another thread regarding the Coverage of Petrol Pumps under the Factories Act, where multiple interpretations exist. The link to this thread is https://www.citehr.com/492917-covera...ct-1948-a.html
Regards
From India, Mumbai
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Therefore, there exists ambiguity and confusion. You may disagree with me, and that is acceptable.
Ambiguity and confusion are prevalent in our entire legal system, and the ESI Act is not immune to it. In fact, there are many ambiguities and confusions within the ESI. Uniformity is lacking across the country in various aspects.
How Should We Proceed Under Such Circumstances?
My query to you and the HR community is: how should we proceed under such circumstances? I pose this question in the hope that we can collectively work towards establishing uniformity in the legal system.
A similar question was raised by me in another thread regarding the Coverage of Petrol Pumps under the Factories Act, where multiple interpretations exist. The link to this thread is https://www.citehr.com/492917-covera...ct-1948-a.html
Regards
From India, Mumbai
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For the purpose of coverage, you can refer to the Bare Act that elaborates on the coverage of ESIC. Nowhere in the Act are construction companies excluded from the coverage. Referring to instruction no: 4/99, it also states that "Such construction agencies employing 20 or more persons in their offices, situated in implemented areas, are coverable under the scheme." Only the workers located at remote sites where ESIC benefits cannot be extended are excluded.
I have had my own experience with this when we received a written NOC from the regional ESIC office in Rajasthan to exclude workers posted at a site for a Highway project from ESIC coverage.
Secondly, all such construction companies situate their registered offices in metro locations or big cities covered under the Shops & Establishments Act as well as ESIC. However, work sites are required to obtain separate licenses under the Factories Act in cases such as installing an RMC plant or under the Mining Act for quarrying activities.
Regards.
From India, Gurgaon
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I have had my own experience with this when we received a written NOC from the regional ESIC office in Rajasthan to exclude workers posted at a site for a Highway project from ESIC coverage.
Secondly, all such construction companies situate their registered offices in metro locations or big cities covered under the Shops & Establishments Act as well as ESIC. However, work sites are required to obtain separate licenses under the Factories Act in cases such as installing an RMC plant or under the Mining Act for quarrying activities.
Regards.
From India, Gurgaon
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Dear All PFA copy of Circular dated 02 01 2011 regarding extension of ESI coverage to the Construction workers for information. N Nataraajhan
From India, Bangalore
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From India, Bangalore
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Apart from what Soubhik said, the circular of 2011, in my view, does not seem to be the final word on the coverage of construction sites since it proposes to conduct a survey and collect necessary data to examine whether it should review the position taken in the circular 4/99. Until then, the circular 4/99 rules the subject.
Regards,
B. Saikumar
In-House HR & IR Advisor
Navi Mumbai
From India, Mumbai
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Regards,
B. Saikumar
In-House HR & IR Advisor
Navi Mumbai
From India, Mumbai
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Most of the arguments are < >, so it is better to engage any contractor who has all ESI and PF registration code numbers. There is a lack of clarity among government departments from state to state. As HR professionals, we cannot disobey the orders of authorities, nor can we engage in arguments with them. The PF and ESI circulars are frequently issued or changed; initially, there is not a single circular on STAND.
Regards,
PBS KUMAR
From India, Kakinada
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Regards,
PBS KUMAR
From India, Kakinada
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With reference to the remarks of seniors and experienced HR officials and advisors mentioned above, I may submit the following:
Ambiguity in ESIC Circulars
1. In my opinion, there is no ambiguity, nor is it correct to say there is no clarity in the circulars issued by ESIC regarding the coverage of construction sites.
Correct Position on Construction Sites
2. The correct position, in my opinion, has been mentioned by me in my remarks in this thread earlier. "Construction sites/agencies" are treated as a separate class of establishments under section 1(5). Only the employees of construction agencies doing (a) repair/extension work in covered establishments/factories (as per section 2(9)) and (b) their offices located in implemented areas (u/s 1(5)) are coverable as shops under the said Act. This is what circular No. 4/99 dated 14/6/99 of ESIC tries to explain.
Policy Guidelines and Implementation
3. If there is no proper implementation of policy guidelines, the issue can be contested either at a higher level or in honorable courts. The policy guidelines are required to be interpreted with reference to provisions of the Act/rules/regulations and notifications issued under section 1(3) or 1(5) of the ESI Act, 1948. Some contributors are interpreting the circular dated 3/1/2011 as a notification for the coverage of construction sites, which is not correct. The circular dated 3/1/2011 is just an internal circular of ESIC and is not relevant for the general public.
Notification on Construction Sites
4. The appropriate governments have never issued any notification covering "construction sites" under the provisions of the ESI Act, 1948. It is another aspect that by virtue of judicial interpretations, the offices of such construction companies are treated as "shops," hence coverable in view of notifications issued under section 1(5) by the appropriate governments.
5. I hope that on account of my submission, seniors, HR officials, etc., may kindly reconsider their opinion so that they may be able to form a proper opinion to avoid any wrong interpretation and unnecessary litigation in the matter.
From India, Noida
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Ambiguity in ESIC Circulars
1. In my opinion, there is no ambiguity, nor is it correct to say there is no clarity in the circulars issued by ESIC regarding the coverage of construction sites.
Correct Position on Construction Sites
2. The correct position, in my opinion, has been mentioned by me in my remarks in this thread earlier. "Construction sites/agencies" are treated as a separate class of establishments under section 1(5). Only the employees of construction agencies doing (a) repair/extension work in covered establishments/factories (as per section 2(9)) and (b) their offices located in implemented areas (u/s 1(5)) are coverable as shops under the said Act. This is what circular No. 4/99 dated 14/6/99 of ESIC tries to explain.
Policy Guidelines and Implementation
3. If there is no proper implementation of policy guidelines, the issue can be contested either at a higher level or in honorable courts. The policy guidelines are required to be interpreted with reference to provisions of the Act/rules/regulations and notifications issued under section 1(3) or 1(5) of the ESI Act, 1948. Some contributors are interpreting the circular dated 3/1/2011 as a notification for the coverage of construction sites, which is not correct. The circular dated 3/1/2011 is just an internal circular of ESIC and is not relevant for the general public.
Notification on Construction Sites
4. The appropriate governments have never issued any notification covering "construction sites" under the provisions of the ESI Act, 1948. It is another aspect that by virtue of judicial interpretations, the offices of such construction companies are treated as "shops," hence coverable in view of notifications issued under section 1(5) by the appropriate governments.
5. I hope that on account of my submission, seniors, HR officials, etc., may kindly reconsider their opinion so that they may be able to form a proper opinion to avoid any wrong interpretation and unnecessary litigation in the matter.
From India, Noida
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ESI - Construction site workers.pdf